CFTC Proposed Rule: Governance Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities; Additional Requirements Regarding the Mitigation of Conflicts of Interest

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Dodd-Frank Timeline, DCO,DCM, SEF Governance Standards, Additional Requirements
Proposal Date Comment Deadline Final Rule Issue
January 6, 2011 June 3, 2011 TBA

On December 9, 2010, the CFTC held an open meeting on the Seventh Series of Proposed Rules under the Dodd-Frank Act. Among the topics at this meeting was a rule proposal regarding governance requirements for derivative clearing organizations (DCOs), designated contract markets (DCMs), and swap execution facilities (SEFs). The proposal also added additional requirements regarding the mitigation of conflicts of interest among common registered entities. This proposal serves as an adjunct to a governance requirements proposal from the CFTC Open Meeting, October 1, 2010. Several additional rule proposals address multiple swap clearing entities

Highlights of the Proposal
To implement the Conflicts of Interest Core Principles, the Commission proposes the following regulations:

  • Each DCO must report to the Commission when its board rejects a recommendation from or supersedes an action of the Risk Management Committee.
  • Each DCM or SEF must report to the Commission when its board rejects a recommendation from or supersedes an action of the Regulatory Oversight Committee or the Membership or Participation Committee.
  • Each DCO, DCM, or SEF must implement programs and monitor existing and potential conflicts of interest.
  • Each DCO, DCM, or SEF must prescribe limits on the use or disclosure of non-public information by owners, members of the board, members of any committee, officers or other employees and make certain information on governance arrangements available to the public.

Related Documents: Fact Sheet, Q&A, and Rule Proposal as it Appeared in the Federal Register[edit]


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